Ethical and discretionary responsibilities of a business firm are listed in the order of priority. First, a firm has to satisfy its economic responsibilities, followed by fulfilling legal responsibilities in order to survive in the market. Only then, it can think about or focus on purely voluntary actions pertaining to ethical consideration. In this competitive market situation, a business unit has to concentrate on profit making, the primary motive behind any business activity. However; it is easier said than done. You cannot hit the bull's eye at the very first attempt. A firm has to become economically stable first; only then, it integrates social commitments in its agenda.
Arguments for Social Responsibility:
Public Image: Socially responsible firms gain more customers and employees feel proud to work for such organizations.
Handling the Government Regulations with Ease: Government is a massive institution with long arms. It seeks to regulate business in public interest. Before government stretches its long arms, businesspersons should discharge their obligations to society.
Business Is Resourceful: With a pool of resources, such as capital, labour and expertise, business is in a better position to tackle social problems and work for social goals.
Let Business Try: It is that many other institutions have failed in handling social problems. So why should not a business enterprise handle social problems?
Prevention is Better than Cure: Social problems have to be handled by the management at some point of time or the other. Problems with labour unions should be handled in a diplomatic way, so that they will not develop into serious social breakdown that consumes most of the management's time.
As a Token of Gratitude: Business units benefit from society. Based on the commonly accepted principle, that one owes debts of gratitude towards those who benefits us, the corporations have debts that it owes to society.
Arguments against Social Responsibility:
Profit Maximization is the Ultimate Goal: Business units are accused of having profit maximization as their goal. Since business operates in a world of poverty and hunger, the economic efficiency of business is a matter of priority and should be the sole mission of business.
Society has to Pay the Cost: The costs of social responsibility will be passed on to the society and the question is can the society bear these additional costs?